Occupational health services: A supportive business case

Some organizations may have doubts about the value of occupational health services, but the numbers don’t lie

Occupational health services (OH service) must justify their position within, and the value offered to, the workplace. Developing a business plan, working it, and then, measuring and reporting on the service’s performance, are critical. Unfortunately, this approach is often overlooked and the resulting lack of performance measurements hampers OH services from demonstrating their value to their organizations. Consequently, senior management teams may sometims question the value of an OH service and its personnel.

However, despite the doubts of some in senior management,  a look at the numbers shows OH services and occupational health nurses (OHN) are beneficial to an organization.

OH service

Occupational health (OH) is “the promotion and maintenance of physical, mental and social well-being of workers by preventing departures from health, controlling risks and the adaptation of work to people, and people to their jobs,” the World Health Organization stated in 1950. OH positions the employer to establish and maintain a safe and healthy work environment that maximizes worker physical and psychological health, and aligns the work with human capabilities. OH services assist with the creation of a supportive work culture and positive social climate, so business runs smoothly and productively.

OH risks

OH risk is the probability of a loss — static risk is a loss in which there is no hope of gain. A risk analysis identifies and evaluates real and potential risks. To quantify Canadian health risks, consider these costs:

• For the economy:

• Depression costs the economy more than $32.3 billion annually (CBC, 2016)

• Anxiety costs $17.3 billion a year (CBC, 2016)

• Musculoskeletal disorders (MSDs) cost upwards of $22 billion annually. Musculoskeletal injuries cost an additional $15 billion (CIHR, 2014).

• Direct costs of oral disease treatment are $11.6 billion (Health Canada, 2010)

• Physical inactivity costs $10 billion (Katzmarzyk, 2016)

• Obesity costs between $4.6 and $7.1 billion annually, and contributes to diabetes, high blood pressure and cancer. By 2019, it is estimated that 21 per cent of Canadian adults will be obese (Twells, 2014)

• Addiction costs are $40 billion or $1,267 per Canadian. Tobacco accounts for 43 per cent ($17 billion), while alcohol accounts for 37 per cent.

• For employers:

• Smokers cost $4,256 in lost productivity and absenteeism (CBC, 2013)

• Work stress contributes to 40 per cent in staff turnover costs, which are priced at twice the employee’s annual salary (Tangri, 2003)

• Almost 25 per cent of Canadians (175,000 full-time workers) live with mental illness and are absent from the workplace (CAMH, 2016; CBC, 2016)

• Physical-disorder claims cost on average $9,000; psychological disability, $18,000 per case (CAMH, 2011)

• Work-related injuries (2015) cost an average of $34,269 (Dyck, 2017)

• Work fatalities total an average of $4 million

• Preventable injuries (2010) exceed $26.8 billion/year (PHAC, 2015)

• Fatigue equals $330 million annually in lost productivity and is associated with absenteeism, presenteeism, workplace injuries, and health conditions such as high blood pressure, depression, stroke and obesity (Baglien, 2015)

• Presenteeism — employees being at work but not productive, costs nine times more than absenteeism. Presenteeism is often health-related and can be managed with support from an OH service and OHNs.

Hence, the overall “risk price-tag” is more than $167 billion. Through OH programming, OHNs can significantly assist organizations to prevent and mitigate these risks and staggering costs. OH Services have been shown to lower illness/injury rates and costs by between 10 and 50 per cent (WSPSO, 2011); hence, financial losses can be managed and loss avoidance realized:

This approach calculates the financial and human costs that could negatively impact the workplace, by using population and occupational data, as opposed to strictly occupationally-specific data.

Similarly, Health & Safety Ontario presented The Business Case for a Healthy Workplace, 2011. Using occupationally-specific data, their report advocates prevention and mitigation of employee illness and injury. Examples of successful industry interventions, known costs of “doing nothing” and industry-realized financial benefits, were provided. It concluded that employers can annually save:

• “$700 million in stress-related absences

• $2.2 billion in lost productivity due to mental illness

• $6.6 billion in lost productivity due to all forms of clinical and sub-clinical mental illness

• $1.1 billion in absenteeism due to work-family conflict.”

If, according to Fries, 20 to 30 per cent of health conditions are preventable, then OH services could offer a 20 to 30 per cent cost reduction in these known risks, regardless of the cost model. That amount of loss avoidance would vastly outweigh the funding of any OH service. Research supports that the return on investment (ROI) of an OH service is $3-$5 for every $1 spent.

Going forward

Risk management and loss reduction are important given Canada’s aging workforce. With 36 per cent of Canadian employees over the age of 55 (Statistics Canada, 2017), the risks of chronic health conditions, musculoskeletal disorders, and complications of injury are high.

Likewise, 20 per cent of Canadian employees are foreign-born (Stats Canada, 2011). Before coming to Canada, some experienced significant political, social and economic hardships along with health problems.

The legalization of marijuana; the planned limitations on the employer’s right to seek medical validation of employee casual absenteeism (Ontario); and the newly-recognized psychological conditions per the Diagnostic and Statistical Manual of Mental Disorders (DSM5, 2013); all make it difficult for employers to differentiate between culpable and non-culpable behaviour.

Employers must factor these realities into their occupational health and safety efforts. Having an OH service and OHN educated in health risks and suitable interventions, positions employers to uphold the applicable Occupational Health & Safety General Duty Clause: To provide a safe and healthy workplace.

OH service’s value

In-house or external OH Services provide needed technical expertise to establish and maintain safe and healthy working environments. Physical and psychological health are critical to maximizing human performance. Likewise, a work environment that supports employees to safely do their job, be able to do the job, be equipped to do the job, and be motivated (want) to do the job, is critical (Roithmayr, 2017). The value of OH services and OHNs is supported clinically (Table 2).

    Investing in an OH service and employing an OHN can save organizations a considerable amount of money and position it to retain its valuable human capital.

Dianne E. Dyck is an occupational health nurse and occupational health and safety specialist with  Progressive Health & Safety Consulting in Calgary.  She can be reached at (403) 282-9330 or [email protected].

 

Table 1: OH Service
Risk Reduction

Risk ($)

Reduction Rate

Loss Avoidance ($)

$167B

10%

$16.7B

$167B

20%

$33,4B

$167B

30%

$50.1B

$167B

50%

$83.5B

 

Table 2: Value of OH services and OHNs

Contributions

Value to Company

Qualifiers

Manage Internal OH&S Program

42% saving over external OH Services

Internal OH&S Programs are 42% less costly than are external OH&S services (Lantos).

Pre-placement Assessments

Right people for the job

Good person-job fit lowers absenteeism and staff turnover, priced at twice employee annual salary. The average Canadian annual salary (2016) was $53,643K, making the cost-avoidance $107.2K per employee.

Periodic Risk-based Monitoring

No fines/penalties

OH&S legislation requires hearing conservation, respiratory conservation and monitoring for some chemical exposures. Non-compliance fines can be levied.

Emergency Preparedness

No fines/penalties: Less loss

Emergency preparedness is legislated. OH Services can enhance preparedness and mitigate the risk of further injury/death. Non-compliance fines can be $500K.

Ergonomic Support

Increased productivity: Lower WCB costs for musculoskeletal injuries

Management of ergonomic-related conditions reduces WCB claims and increases worker productivity (WHSC).

Workers’ Compensation Reporting

No fines/penalties

Failure to report worker injuries/illness can result in fines; $100/late day to a $25,000 fine (AWCBC).

Attendance/Disability Management

• 30-50% cost-avoidance


19% savings with an integrated disability management program (IDMP)

Management of absenteeism/disability reduces costs by 30-50% (NIDMAR, 2004). The average cost for medical absences was $2,116 (Hewitt). A 30-50% reduction would lower this cost to $1,058-$1,411 per employee/yr. With 1000 employees, the saving would be $0.6M-$1.1M. With an IDMP, OH Services can save companies 2.8% of payroll.

EFAP Oversight

65% productivity increase

EFAPs result in a 65% reduction in stress and improved productivity. Mental health issues cost almost $1,500/employee/yr (Benefits Canada). OHNs help employees identify and manage their distress and reduce costs; preventing a psychological disability ($18K) (CAMH).

Workplace Wellness

Increased productivity

OH Services can manage WWPs; they offer a $1.95 to $3.75 ROI with an annual return of $500-$700 per employee (Sheppard).

Employee Support

Priceless!

OHNs’ relationship with employees have been shown to enhance compliance with treatment regimens, rehabilitation plans, and lifestyle changes (Anderson).

Employee Loyalty

“For every 5-unit increase in employee satisfaction in a [business] quarter, there is a 1.3-unit increase in customer satisfaction in the next quarter, and a 0.5-unit increase in revenues” (H&S, Ontario, p.8).

By addressing psychosocial issues, OHNs can help employees and increase their job satisfaction and health.



Latest stories